What you actually pay on a spot electricity plan, line by line

There is a mistake that costs people real money when they think about spot pricing, and it is this: assuming the wholesale price is the price.

It isn’t. The wholesale price is the first line of the calculation, not the answer. If you make decisions on the wholesale number alone — “prices are negative, I should use as much power as possible” — you can be badly wrong about whether you’re actually ahead.

This article walks the whole build-up, with a real Tasmanian reading, so you can do the sum yourself.

The one thing to understand first

Here is the principle that sits under everything else:

Every LocalVolts customer in Tasmania pays the same wholesale energy price at the same moment. The only things that legitimately differ between two Tasmanian homes are the network tariff and a small location factor.

This matters more than it might sound. Wholesale pricing is a pass-through: the retailer isn’t setting your energy rate, the market is, and the market sets one price for the whole Tasmanian region every five minutes. Nobody negotiated a better wholesale rate than their neighbour. There is no secret tier.

So if two Tasmanian homes on the same kind of plan are shown different energy prices at the same instant, something is wrong with the display, not with the market. We consider that a bug when we see it, and we’ve built our own systems so that every site we manage prices from a single shared source. One price, one formula, everywhere.

What genuinely does differ between two homes is the network tariff — the poles-and-wires charge, set by TasNetworks — and the distribution loss factor, a small adjustment for where you sit on the network.

The build-up, step by step

Here is a real reading from the Tasmanian region, taken during a weekday evening peak:

Step	What it is	Value
1	Wholesale spot price	$88.20/MWh = 8.82 c/kWh
2	× distribution loss factor (1.058)	9.332 c/kWh
3	+ environmental certificate costs	+ 0.755 c/kWh
4	+ network charge (Tariff 97, peak period)	+ 20.853 c/kWh
5	Subtotal	30.94 c/kWh
6	+ GST (10%)	34.03 c/kWh

So a wholesale price of 8.8 c/kWh arrives at your meter as 34 c/kWh during an evening peak.

Look at what dominates that number. The wholesale price is 8.8 cents. The network charge is 20.9 cents — more than double. At peak times on a spot plan, the network charge is the biggest line on the bill, not the energy.

That single fact reshapes how you should think about spot pricing. The savings do not come from clever trading. They come from not buying power during the periods when the network charge is high.

Exports work differently

Selling power back runs on a shorter formula. There is no network charge on export — you aren’t using the poles and wires to bring power in — and no GST on the credit.

At the same moment as the table above, the export rate was 9.332 c/kWh: the wholesale price adjusted by the loss factor, and nothing else.

That’s worth sitting with. At that instant the household was paying 34 c/kWh to import and receiving 9.3 c/kWh to export. The gap between those two numbers — about 25 cents — is the value of every kilowatt-hour you can supply yourself instead of buying. This is the same arithmetic that makes self-consumption worth doing on a fixed tariff, where the Aurora feed-in tariff of 9.276 c/kWh sits against an import rate of roughly 28–30 c/kWh on Tariff 31.

Different plan, same lesson: the cheapest kilowatt-hour is the one you never buy.

Which network tariff are you on?

This is the part people get wrong most often, and getting it wrong changes the sums substantially. The current Tasmanian residential network tariffs:

Tariff	What it is	Status	Peak times
31	General light and power, flat rate	Legacy — closed to new installations 30 June 2024; existing homes may stay	None (flat)
41	Heating and hot water, separately metered flat rate for hard-wired circuits	Legacy — closed same date; normally paired with Tariff 31	None (flat)
93	Residential time-of-use, whole of home	Default — every new or upgraded residential connection since 1 July 2024	Weekdays 7–10am and 4–9pm (daylight saving: 8–11am and 5–10pm)
97	Residential consumer energy resources time-of-use — aimed at solar, battery and EV homes	Opt-in, newest	Weekdays 7–10am and 4–10pm; super off-peak midnight–4am every day

Two corrections worth stating plainly, because both are commonly misreported:

Tariff 93 is the default, not Tariff 31. If your connection is new or was upgraded after mid-2024, you are almost certainly on a time-of-use tariff already.
Tariff 97 is not a controlled-load or hot-water tariff. That is Tariff 41. Tariff 97 is a whole-of-home tariff with a super off-peak window.

Tariff 97’s evening peak runs an hour longer than Tariff 93’s — until 10pm rather than 9pm. That is the real trade-off: the midnight-to-4am super off-peak window only pays for itself if you have something that can actually use it, like a battery or an EV charger. It also carries an excess demand charge above 8.5 kW, though TasNetworks says around 97% of homes stay under that.

Doing the sum yourself

If you want to sanity-check any price you’re shown, the formula is:

import c/kWh = (spot c/kWh × loss factor + certificates + network charge) × 1.1
export c/kWh =  spot c/kWh × loss factor

Two useful checks fall straight out of it:

A negative wholesale price does not mean you are paid to import. With a network charge of 20 c/kWh sitting on top, wholesale has to go a long way below zero before importing actually pays. How far depends on your tariff and the time of day — we’ve worked that through in negative electricity prices in Tasmania.
A forecast is not a price. Wholesale feeds often publish a forecast for the next interval alongside the current settled one. They are different numbers and they routinely disagree, sometimes by a lot. If a figure moves when nothing happened, you may be looking at a forecast.

The practical takeaway

Pull out your latest bill and find three things: your import rate, your feed-in rate, and your tariff number. Those three tell you more about whether a spot plan or a battery makes sense for you than any amount of general advice.

The gap between import and feed-in is the value of self-consumption, and it applies on every plan. The tariff number tells you when the expensive hours are. And on a spot plan, avoiding those hours — not predicting the market — is where the money actually is.

This guide was written by the Tasmanian solar team at Solar Generation Tasmania.

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Published by Solar Generation Tasmania. General information current as at publication — rebates, tariffs and prices change, so confirm current figures before deciding.